When I approach people about helping others, most do say that they are interested in being involved. They also tell me they are not sure about how, where, and what to do to start their engagement. Often, they labor under ideas that might seem right, but may not be and keep them from beginning their richer lives found in giving. So, let’s debunk some of these “myths” that keep too many from learning about the power of philanthropy to change lives for the better.
Myth Number 1:
Philanthropy is only for very wealthy people who can donate thousands (or millions) of dollars.
Reality:
Large donations certainly get a lot of attention and often can be “game changers” for smaller organizations. But most philanthropic gifts are much smaller, with most donors giving around $2,000 per year. All donations are important to nonprofit organizations, so don’t be afraid to give smaller gifts that are suitable for your financial resources.
Myth Number 2:
Most contributions are wasted or go to fund “overhead” rather than helping people in need.
Reality:
While one can never be certain that gifts are never inefficiently used, responsible nonprofit organizations are careful stewards of their resources. They care deeply about their missions and work diligently to see that all resources are wisely used to help intended audiences. “Overhead” (facilities, salaries, benefits, and the like) is a necessary part of any business operation, and long-successful organizations must be able to attract the talent and other resources needed to sustain the organization and allow it to succeed through time. Wise donors recognize the importance of “overhead” and support this aspect of charitable effectiveness along with the resources devoted to helping intended beneficiaries. Additionally, financial information is readily available for 501(c) (3) charities so that you can see where your contributions will go.
Myth Number 3:
Volunteering isn’t “philanthropic” and isn’t that valuable to nonprofits.
Reality:
The value of volunteer hours donated (at a low wage value) is equivalent to the dollars given each year making volunteering not only valuable but critical to the success of most nonprofit organizations. Unique skills (marketing, legal, accounting, management, etc.) are even more valuable to nonprofits and therefore are the most valuable contributions. Considering the value of volunteers to nonprofits, donating time and skills can be most important and very philanthropic.
Myth Number 4:
Organizations only want cash donations.
Reality:
While cash is the most common form of donation, many philanthropic people donate stocks, securities, real estate, business interests, art, IRA accounts, life insurance, and other assets that may make better donations for them. These types of gifts may present uniquely valuable tax benefits, which may make them a better idea than donating cash.
Myth Number 5:
If I want to make a large, lasting impact, I should establish and fund a foundation.
Reality:
Foundations can certainly play a key role in making a significant impact over time. But many donors are finding similar (or better) tax and impact benefits by using Donor Advised Funds instead. These “personal giving accounts” are established at public charitable organizations without the legal work needed for a foundation, nor are they controlled in the same manner as a foundation (its board). DAFs also permit current or deferred granting to nonprofit organizations rather than the required minimum annual distributions foundations must make.
Many people believe philanthropy is the exclusive province of the very rich. As we learned here, this is also a myth. We all have something to offer, be it time, talent, or treasure. We all can be “philanthropists” and help change lives around us through our many contributions. This also opens the door to living our own “richer life”. How will you help others learn, grow, and thrive?
Please reach-out to me if you would like to learn more or simply help debunk these myths further: richard@successwithpurpose.org.
